** Beverage company Primo Brands' PRMB.N shares rise 2% at $31.70

** Brokerage BMO Capital Markets initiates coverage on stock with "outperform" rating and PT of $40, a 28.7% premium to last close

** Brokerage says PRMB is poised to realize strong adjusted EBITDA growth driven by above average sales growth and solid margin expansion

** Primo Water and BlueTriton announced merger in June, creating PRMB, which houses water brands such as Poland Spring, Pure Life and Deer Park, as well as premium brands Mountain Valley and Saratoga

** "It may take some time for PRMB's multiple to more closely reflect its increasingly branded beverage mix as investors gain comfort with the outlook for combined Primo/BlueTriton business" — BMO analyst Andrew Strelzik

** Brokerage RBC raises PT to $38 from $35, says "beyond traditional mass market bottled water, we see strong potential for Primo's premium Mountain Valley and Saratoga brands, which are growing at a rapid pace in an attractive segment of the market"

(Reporting by Aamir Sohail in Bengaluru)

((Aamir.Sohail@thomsonreuters.com))